The Table Lists the Drinking Habits of a Group of College

question 24

Multiple Choice

The table lists the drinking habits of a group of college students. If a student is chosen at random, find theprobability of getting someone who is a regular or heavy drinker. Round your answer to three decimal places. $$\begin{array} { l | c | c | c | c } \text { Sex } & \text { Non-drinker } & \text { Regular Drinker } & \text { Heavy Drinker } & \text { Total } \\\hline \text { Man } & 135 & 38 & 5 & 178 \\\text { Woman } & 187 & 21 & 6 & 214 \\\text { Total } & 322 & 59 & 11 & 392\end{array}$$

• A) 0.179
• B) 0.629
• C) 0.201
• D) 0.112

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Definitions:

Hidden Actions

Pertains to situations in principal-agent relationships where agents' specific actions are not observable by the principal, leading to a moral hazard.

Hidden Information

Information that is not known to one party in a transaction, which can lead to an imbalance of power or adverse selection.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks, often arising in insurance and finance contexts.

Government Bailouts

Financial support provided by the government to prevent the failure of a struggling company or industry, often to stabilize the economy and preserve jobs.